Middle income trap

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Middle income trap

  1. 1. 1.MOHD ARIF<br /> 2.BUSHRA ZAHIR KHAN<br /> 3.ARTI YADAV<br /> 4.ARMAN ALI<br /> 5.ARUNIMA SHARMA<br /> 6.DIMPLE KUMARI<br /> 7.JYOTSNA<br />MIDDLE INCOME TRAP<br />
  2. 2. WHAT’S THE INDIA STORY<br />
  3. 3. Rising GDP growth<br />% average annual GDP growth<br />1900 – 1950 1.0 <br /> 1950 – 1980 3.5<br /> 1980 – 2002 6.0 <br /> 2002 – 2006 8.0<br />Sources: 1900-1990: Angus Madison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001), 2000-2005 Finance Ministry <br />
  4. 4. Population growth is slowing<br />% average annual growth<br />1901 – 1950 1.0<br />1951 – 1980 2.2<br />1981 – 1990 2.1<br />1991 – 2000 1.8<br /> 2001 – 2010 1.5<br />Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001) <br />
  5. 5. Literacy is rising<br />%<br />1950 17 <br /> 1990 52<br />2000 65<br /> 2010 (proj) 80<br />Source: Census of India (2001)<br />
  6. 6. Productivity is rising<br />30% to 40% of GDP growth is due to <br /> rising productivity<br />
  7. 7. Middle class is exploding <br />% Million<br /> People<br />1980 8 65<br />2000 22 220<br />2010 (proj) 32 368 <br />Source: The Consuming Class, National Council of Applied Economic Research, 2002 <br />
  8. 8. WHAT IS A MIDDLE INCOME TRAP<br />Countries stagnating and not growing to advanced country levels<br />
  9. 9. INCOME AND CONSUMPTION TRRNDS<br />
  10. 10. Figure 1. Changes in income share by economic class<br />
  11. 11. Figure 2. Growth in inflation-adjusted family income<br />
  12. 12. Figure 3. Inflation-adjusted median family income<br />
  13. 13. Figure 5. Annual hours of work in married families, 1979 & 2000<br />
  14. 14. priorities for becoming a determined marathoner<br />
  15. 15. Enormous challenge of managing threesimultaneous transformations<br />
  16. 16. “Managing three transformations simultaneously will be an enormous challenge. To do so, India must anticipate and adapt to the changes wrought by each of these transformations individually and collectively<br />
  17. 17. THREE DIMENTIONS TO GROWTH<br /><ul><li>Society—moving from a poor society to a</li></ul>cohesive affluent society<br /><ul><li>Economy—moving from a domestically oriented</li></ul>to a globally competitive economy<br /><ul><li>World—moving from a small player to a responsible</li></ul>global citizen<br />
  18. 18. “India’s long-term prospects and growth will depend on its ability to balance all three dimensions—society, economy and global citizenship—as it makes policy decisions<br />
  19. 19. Overarching issues of governance<br />
  20. 20. facets of governance must change to transform the Indian economy and society:<br />
  21. 21. Create a smarter, more focused, agile and more credible government.<br />Retool the civil service to meet the needs of today and tomorrow.<br />
  22. 22. Focus on the long term and open the public private dialogue.<br />Support competitive markets and prevent capture of state organs.<br />
  23. 23. Inculcate a code of self-discipline and ethical behavior within the business community.<br /> Reverse the deterioration in political governance.<br />
  24. 24. Implement priorities, monitor results, ensure<br /> transparency and enforce accountability.<br />
  25. 25. “A refocused government is essential to facilitating dramatic transformations in the Indian economy and society. There is a need to rethink not only what the government does but also how it does it<br />
  26. 26. intergenerational issues requiring an immediate start<br />
  27. 27. Tackle disparities and achieve inclusive growth.<br />Dramatically improve the quality of the environment.<br />
  28. 28. Eliminate infrastructure bottlenecks—Create a competitive edge.<br />Improve the delivery of public services—Create<br />functioning cities for sustaining growth.<br />
  29. 29. Renew the focus on education, technological<br />development and innovation—Keys to sustaining<br />improvements in competitiveness.<br /> Launch a revolution in energy—Ensure security and competitiveness.<br />
  30. 30. Foster a prosperous South Asia and become a responsible global citizen—India, its neighborhood<br />and the world.<br />
  31. 31. THE END<br />

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